Posts Tagged ‘saab administrator’

Despite repeated reprieves, it appears time finally is about to run out on long-troubled Saab, the automaker’s court-appointed administrator saying it is time to end the company’s reorganization process – a move that would almost certainly put Saab into insolvency.

The announcement by administrator Guy Lofak follows word that General Motors has refused to approve a deal that would allow Saab to sell a major stake to a consortium teaming Chinese automaker Zhejang Lotus Youngman Automobile and a so-far unidentified Chinese bank. GM, Saab’s former parent, has the right of refusal on any sale and has said it fears that such a deal would result in the transfer of its technologies to the Chinese.

Nonetheless, “We still have five to six days to do it,” a Saab spokesperson said, referring to the likely time it would take for the courts to respond to Lofak’s request. In the meantime, the near-bankrupt maker intends to continue searching for new partners or for a way to get GM to reverse its objection to a sale.

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The crisis at Saab started even before GM decided to sell the company to the Dutch-based company now known as Swedish Cars, in early 2010. The U.S. maker, fresh out of its own bankruptcy, had already dismissed Saab’s board and shut down its headquarters assembly plant in Trolhattan, Sweden. The delay in restarting the plant created a financial shortfall for Saab that, by early 2011 meant it was struggling to pay its bills.

It's increasingly likely Saab's factory in Trollhattan will never build another 9-5.

Saab’s court-appointed administrator will ask to have the automaker’s voluntary reorganization terminated immediately, a move that could force the liquidation of the long-troubled Swedish brand.

The move comes just hours after a private equity firm in the U.S. agreed to purchase $10 million in stock from Saab parent, Swedish Automobile and make available an additional $60 million loan. Last week, Chinese investors came up with an estimated $15 million to help keep Saab going with an additional $81 million in bridge loans to follow before month’s end.

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But with bills mounting daily, even as its core assembly plant in Trollhattan, Sweden remains shuttered, administrator Guy Lofalk appears to have concluded that there is no way to turn things around and that a bankruptcy would be the best opportunity to maximize what can be recovered from Saab’s assets.

“Saab Automobile shall contest this application and request for continuation of the voluntary reorganization process,” the maker announced in a terse statement, adding that, “Simultaneously, Saab Automobile shall apply at the court for replacement of Mr. Lofalk as administrator.”